Investing.com -- Wall Street is hurtling toward one of the most unpredictable Federal Reserve rate decisions in years.

With derivative markets pricing in a staggering 36 percent chance of a surprise rate increase, traders are bracing for a high-wire event that threatens to shatter the fragile summer market calm. While central bank decisions are usually well-choreographed affairs, Wednesday’s meeting presents an explosive, winner-take-all dynamic where billions of dollars hang in the balance.

Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., expects the central bank to ultimately hold rates steady. Yet he warns that internal unity is fracturing, predicting a mutiny of at least two hawkish dissents from officials including Beth Hammack and Lorie Logan pushing for immediate tightening.

To prepare clients for the impending fallout, JPMorgan’s U.S. Market Intelligence desk mapped out five stark scenarios detailing how the stock market could react once the decision hits the tape.

The trading desk views a "hawkish hold" as the most likely outcome, assigning it a 50 percent probability. In this baseline scenario—where the Fed pauses to digest strong labor data while issuing stern warnings on persistent inflation—the S&P 500 would likely wobble between a minor 0.25 percent gain and a 0.5 percent loss.

If the bulls get their dream scenario—a "dovish hold" with a 28 percent probability—the Fed could trigger a broad relief rally, sending the S&P 500 up as much as 1 percent.

However, a surprise quarter-point rate hike carries a 20 percent probability and would deal a severe blow to equities, potentially knocking the S&P 500 down by 1.5 percent to 2 percent. Technology stocks would bear the brunt of the damage, with the Nasdaq Composite facing potentially double those losses as investors flee high-flying artificial intelligence trades for defensive havens.

An extreme half-point rate hike—given a slim 1 percent chance—could spark outright panic, triggering a 2 percent to 4 percent plunge in the S&P 500. Conversely, an unexpected rate cut carries its own dangerous psychological trap: analysts warn a surprise easing could spook investors into believing the Fed is responding to hidden economic rot or caving to political pressure, swinging the market anywhere from a 1 percent loss to a 1.5 percent gain.

Options markets expiring Wednesday are bracing for immediate chaos, pricing in a fast 0.8 percent swing in the broader index.

Despite the heightened anxiety on trading floors, JPMorgan’s market intelligence team believes investors may be overestimating the risk of a rate hike. With gross domestic product expanding near trend levels and inflation showing few signs of a runaway explosion, the desk pegged the true probability of a hike as less than 30 percent—noting that if the Fed truly wanted to shock the market, the time to strike was earlier this summer.